Judgment:
Arun Kumar Goel, J.
1. This appeal at the instance of Insurance Company is directed against the Award passed by Commissioner under the Workmen's Compensation Act, 1923, Rampur, hereinafter referred to as the Commissioner, in case No. 7/91 dated May 30, 1995. By means of a claim filed before the Commissioner by respondents No. 1 to 4 (hereinafter referred to as 'the claimants') against the Insurance Company (hereinafter referred to as 'the appellant') and Satish Kumar Bhalaik (hereinafter referred to as 'the owner') under Section 4 of the Workmen's Compensation Act, 1923, claim was made by the claimants.
2. The brief facts of this case are that Shiv Ram was employed as a truck driver by the owner of truck bearing registration No. HIS 1510 which was insured with the appellant. On November 10, 1990 when the said truck HIS-1510 was going from Theog to Rampur, it met with an accident while negotiating a curve near Rampur, resulting in the death of its driver Shiv Ram, husband of claimant No. 1, Asha Devi, son of claimant No. 2, Najpi Devi and father of claimants Birjesh and Kumari Raksha. According to the claimants, the accident had taken place during the course of his employment and thus on basis that (sic) compensation was claimed by the claimants from the owner as well as the appellant who both were arrayed as respondents before the Commissioner below. While allowing the compensation under Section 4 of the Workmen's Compensation Act, 1923 in the sum of Rs. 84716/, penalty was levied under Section 4-A to the extent of Rs. 42,358/-and interest at the rate of 6% with effect from December 10, 1990 i.e. one month after the date of accident till May 30, 1995 amounting to Rs. 23,273.32 paise was also levied and a total compensation in the sum of Rs. 1,50,347.32 was passed in favour of the claimants and appellant was held responsible for compensation. By means of impugned order, appellant was directed to deposit the amount of compensation within a period of 30 days from the receipt of the said order, failing which it was further ordered that action be initiated as per provisions of Section 32 of the said Act ibid.
3. While admitting the appeal it was ordered by this Court on November 21, 1995 :
'Admit on substantial question of law whether the appellant-Company is liable to pay the interest and penalty as awarded by the Workmen's Compensation Commissioner.'
4. Shri G.C. Gupta, learned counsel appearing for the appellant submitted that the Insurance Company is not the employer within the meaning of Section 2(e) read with Sections 3 and 4-A of the Workmen's Compensation Act, 1923 and as such it cannot be fastened with the liability for the payment of interest and liability as ordered by the Commissioner below in the impugned order. On the other hand, Shri Jagdish Vats, learned counsel appearing for the owner has while controverting this submission made by the learned counsel for the appellant submitted that his client had submitted the papers in time to the Insurance Company and thus it was bound to have paid the amount of compensation on receipt of the said information. Instead of doing so it slept over the matter and has thus exposed itself to the payment of penalty as well as, interest levied by the Commissioner below and has therefore prayed for dismissal of the present appeal.
5. Admittedly, appellant is not an employer within the meaning of Section 2(e) of the Act ibid. For ready reference the definition of an employer under this Act is reproduced herein below:
'2. (e) 'employer' includes any body of persons whether incorporated or not and any managing agent of an employer and the legal representative of a deceased employer, and when the services of a workman are temporarily lent or let on hire to another person by the person with whom the workman has entered into a contract of service or apprenticeship, means such other person while the workman is working for him;'
Similarly liability to pay compensation under Chapter II of the Act ibid is that of the employer and interest is also that of employer. Moreover, under Section 4-A (3) of the said Act, it is the employer in default of payment of compensation due under the Act within one month when it fell due who can be directed by the Commissioner to pay the amount of interest and penalty not exceeding 50% of the amount of Compensation, and the same is also recoverable from the employer. That being the position, the appellant cannot by any stretch of imagination be said to be an employer within the meaning of Section 4-A of the Workmen's Compensation Act, 1923.
6. A reference to Section 4-A may be usefully made here, which is reproduced below :
'4-A. Compensation to be paid when due and penalty for default.--(1) Compensation under Section 4 shall be paid as soon as it falls due.
(2) In cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the event of liability which he accepts, and such payment shall be deposited with the Commissioner or made to the workman, as the case may be without prejudice to the right of the workman to make any further claim.
(3) Where any employer is in default in paying the compensation due under this Act within one month from the date it fell due, the Commissioner may direct that in addition to the amount of the arrears, simple interest at the rate of six per cent per annum on the amount due together with, if in the opinion of the Commissioner there is no justification for the delay, a further sum not exceeding fifty per cent of such amount, shall be recovered from the employer by way of penalty.'
The purpose of enacting this provision seems to be that where employer disputes its liability to the extent of compensation, it is liable to make provisional payment to the extent he accepts his liability, otherwise where he defaults, penalty to the extent of 50% of the amount of compensation and interest at the rate of 6% is leviable under the said provisions. Salutary purpose behind enactment of this provision is that the matter relating to payment of compensation under the said Act is not unnecessarily delayed and where there is a dispute to the extent of liability, legislature in its wisdom has made provision for provisional compensation also. In the present case/owner has not disputed the factum of accident, he has not disputed his liability for payment of compensation, the only defence putforth by him is that the amount is payable by the Insurance Company as the vehicle in question stood insured with the appellant-Insurance Company. In the face of this position, the owner being employer under the provisions of the Act ibid cannot be absolved of his liability for payment of either the compensation or penalty and interest as levied by the Commissioner below.
7. So far submission of Shri Jagdish Vats is concerned, that his client is not liable for payment of interest and penalty that matter need not detain us any further in view of two decisions of this Court i.e. (a) Dromati Devi v. Shri Sohan Singh, (1996-III-LLJ(Suppl.)-850) and (b) judgment dated September 2, 1996 in FAO 106/ 93 United India Insurance Company Ltd. v. Smt. Faroz Begam.
8. In view of the above discussion, it is held that the present appeal deserves to be allowed and it is ordered accordingly. As a consequence of this appeal being allowed, it is held that the claimants are entitled for the payment of interest and penalty as ordered by the Commissioner in the impugned order, however, liability for the payment of this amount will be that of the owner, Shri Satish Kumar Bhalaik and not that of the appellant who is thus exonerated from the payment of this amount.
9. It was reported by the Commissioner under Workmen's Compensation Act, Rampur that the amount of penalty and interest to the extent of Rs. 65,630/- deposited by the appellant with it has already been released to the claimants. In these circumstances, it is ordered that the appellant-Insurance Company will be entitled for the restitution of this amount from respondent-owner Shri Satish Kumar Bhalaik who will be liable for restitution of this amount to the appellant and it is ordered accordingly.
Cost on the parties.